Medicaid funding was immediately suspended, the audit was turned over to the state's Attorney General to conduct a criminal investigation, and five Arizona firms were given emergency, no-bid contracts to take over the New Mexico organizations and their patients.

The state's Human Services Department maintains that the transition is smooth.

“We have two crisis hotlines for folks to call that we monitor on a daily basis in case they feel like they're having additional troubles,” said Matt Kennicott of the New Mexico Human Services Department, in an interview conducted by KJZZ Phoenix.

“We're able to move in with additional support whether that be payroll or one of the transition agencies, to make sure that folks are still receiving the care they're entitled to," Kennicott said.

“No, it’s not a smooth transition,” said Paul Weeks, a therapist with Valencia Counseling Service in Los Lunas, N.M. which is now being run by Valle Del Sol of Phoenix. “The agency right now is very chaotic. All of the scheduled clients that I had have been taken off. There’s no schedule, there’s no computer, there’s nothing.”

When Weeks said there’s no computer, he means no computer. Anywhere. They were all removed by Valencia management when the new Arizona firm came in. Because of that, all assessments and intakes are now being done by hand.

“So the assessments take approximately two hours to complete,” Weeks said. “That’s an assessment and a treatment plan. We have three, three and a half therapists there, doing assessments, and generously we can do five assessments in a day.”

Five assessments a day for about 2,000 clients that need to get back in the doors. At Valencia, many clients are extremely fragile: they’re homeless, or suffering from PTSD, anxiety disorders, or drug addictions.

“We’re having a hard time getting Neil a therapist,” said Gay Finlayson of Albuquerque. Neil, her 24-year-old son, has schizophrenia. “He was seeing a therapist at Hogares who quit around the time of the takeover and then we were just told that we would be getting a phone call about a new therapist and haven’t heard anything.”

Hogares was one of the agencies accused of fraud and subsequently taken over.

“He counts his medication and told me ‘I have enough pills for so many days,’ and then asks me a lot about is he going to go into the hospital,” said Finlayson. “We were assured that ‘you’ll be taken care of,’ and so far we’ve heard nothing.”

There also seem to be problems for people receiving services from agencies that have not had their funds frozen by the state. Adrienne Jones has two children receiving behavioral health counseling in Albuquerque.

Bryant Furlow

Sidonie Squier, head of New Mexico's Human Services Department, defended the decision to freeze Medicaid funds at a Legislative Finance Committee hearing in July.

“Services have been so disrupted in the agencies that are involved in the audit that overflow patients – patients who can’t get their needs met at the audited agencies – are filling up the other agencies, making services really difficult to get for everyone,” Jones said.

The state's Department of Health says New Mexico already has a shortage of mental health workers as it is.

There’s one other thing about the audit that accuses the behavioral health agencies of fraud: nobody except the state's Human Services Department, Attorney General, and State Auditor has seen the actual audit. Not even those accused of fraud.

News organizations in the state, including Fronteras Desk partner New Mexico In Depth, have filed suit to have the full paperwork released.